We’re running out of sheds, says CBRE
THE current supply of new industrial property stock in the West Midlands will run out next year, research from property consultants CBRE has revealed.
Latest figures for the region’s industrial property market show that at the current average annual take-up rate of 1.73m sq ft there is only enough stock to sustain the market for another one and a half years.
In the West Midlands, just 2.66m sq ft of new, modern industrial units above 100,000 sq ft are available for occupation. This is down from 3.14m sq ft at the end of 2010. In total, including secondhand modern and other secondhand units, there is 5.58m sq ft available.
At the end of 2011 take-up of new industrial units totalled 2.92m sq ft, almost identical to the 2010 total of 2.94m sq ft and slightly below the annual average of 3.13m sq ft.
Richard Meering, senior director in the industrial agency team at CBRE in Birmingham, said the shed market has held up well in what continues to be a challenging environment for the property sector but warned that a complete lack of available stock was now a very real prospect.
“The region’s industrial property market put in another positive performance in 2011, with leasing activity mirroring that of the previous year,” he said.
“However, as available stock continues to decline, and with no new stock in the pipeline, we could see take-up levels fall this year, as was the case in the East Midlands last year, where take-up plummeted from 6.8m sq ft in 2010 to just over 2.1m sq ft in 2011. Interestingly, it is the first year industrial take-up in the East Midlands has been lower than the West Midlands.”
With availability of new industrial units in short supply, Meering said there would be increasing opportunities for developers offering “oven ready” design and build schemes.
He also said developers are starting to consider speculative building again, particularly units in the 10,000 – 60,000 sq ft bracket, and there is a strong likelihood that the first speculative schemes since 2007 will be built this year.
